Hand write out your goals and make sure they are SMART. Specific. Measurable. Achievable. Realistic. Timely.
Specific: Make sure they are specific. You cannot say you want to payoff debt and not have a defined goal in mind. You would say, “I want to payoff my debt by April 2022 at the final place that I owe money to because I am sick of living paycheck to paycheck.” If you miss the mark, IT’S OKAY! You just stretched the goal a little further than you initially wanted.
Measurable: It is imperative to track your progress. Whether you are paying down your debt, building your emergency fund, or saving for a particular expense, make sure you keep track of where you are. Small progress is still progress. This will help you continue to be focused on what the end goal is.
Achievable: You will come across some opposition when you begin your journey. You will need to understand what resources are available to help you achieve your goal. Find others who are in a similar position, doing the same thing, who are actually achieving the results that you desire. This will motivate you to continue.
Realistic: You have $100,000 in student loan debt. You say, “I want to payoff my debt by April 2021 and I make $65,000 per year.” That is not realistic. A more realistic goal would be, “I make $65,000 per year and I am going to pay off the $100,000 in student loan debt by April 2023 by paying $33,000 per year towards debt. I am going to work side hustles and not go on vacation (Thanks COVID-19), in order to keep food on the table and stay aggressive.”
Timely: Make sure you have a deadline. You can wander into debt, but you cannot wander out of debt. If you don’t give yourself a deadline to get the debt paid off, you will not be able to track your progress (which we just determined that it is imperative to track your progress). When will you be finished with your goal?
You can do this. Do you believe it? We do! Now believe you can do it too.
Madsen Financial Coaching 